The Affordable Care Act in Oklahoma

1. The Affordable Care Act in Oklahoma Presentation to the National Association of Social Workers, Oklahoma Chapter March 25, 2013 David Blatt Director, Oklahoma Policy Institute dblatt@okpolicy.org 918-794-3944

2. Overview of the ACA • Provisions in effect (2010-2013) • Pending provisions (2014)

3. By design, the Affordable Care Act (ACA) will: • Improve health care security • Improve health care quality • Improve health care access

4. For businesses with <25 FT employees (earning on average ≤$50k/year) who pay at least half of their employees’ insurance premiums • Credit is worth 35% of cost of insurance (25% for non-profits) • 170,300U.S. businesses claimed an average credit of $2,700 • Around 50,000 Oklahoma businesses are currently eligible, with a little more than half of these not currently offering insurance Provisions Now In Effect:Small Business Tax Credit

5. Subsidies for employers to continue to provide coverage to workers (and their families) who retire between the ages of 55 and 65 Provisions Now In Effect:Early Retiree Reinsurance • OG&E • The City of Altus, Ardmore, Edmond, Moore • Union Public Schools • Devon • ONEOK • Conoco Phillips • The Oklahoma Publishing Company

6. Oklahoma’s Temporary* High Risk Pool covers individuals denied insurance because of a pre-existing condition & uninsured for ≥ 6 months • 1,025 enrollees in Oklahoma (as of 3/20/13) • New enrollment suspended nationally as of 3/2/13 • $77.4 million appropriated to Oklahoma Provisions Now In Effect:Pre-Existing Condition Insurance Plan (PCIP) *PCIPs will be discontinued in 2014, when guaranteed issue rule takes effect

7. All new plans (9/2011) must cover certain preventive services without a deductible, co-pay or coinsurance Provisions Now In Effect:Insurer Regulation & Oversight • Well-woman visits • Gestational diabetes screening • STI and HIV screening and counseling • Contraception and contraceptive counseling • Breastfeeding support, supplies, and counseling • Domestic violence screening • Blood pressure, diabetes, and cholesterol tests • Cancer screenings • Routine vaccinations (measles, polio, meningitis) • Flu and pneumonia shots • Regular well-baby and well- child visits Not exhaustive; For a full list of required preventive care, see: http://www.healthcare.gov/law/features/rights/preventive-care/index.html

8. Recission: Insurers can no longer search for errors/technical mistakes on your application and use this error to deny payment or drop coverage when you get sick • Roughly 49,000 young adults aged 19-25 in Oklahoma have been able stay on their parent’s insurance plan • Insurers are prohibited from imposing lifetime limits on essential benefits and are restricted in imposing annual limits on benefits • New plans that cover children can no longer exclude, limit, or deny coverage to your child based on a condition that your child developed before you applied for coverage Provisions Now In Effect:Insurer Regulation & Oversight(Effective Date 9/2010)

9. Medical Loss Ratio – Insurance companies are required to spend a minimum share of premium dollars on health care services and quality improvements • 80% for individual and small employer plans • 85% for large employer plans • Oklahomans expected to receive $20 million in MLR rebates in 2012 [Congressional Research Service, Sept. 2012] • 263,000 consumers receiving an average rebate of $126 • Rate Review: Health insurers must justify unreasonable health insurance rate increases to states and the federal government Provisions Now In Effect:Insurer Regulation & Oversight(Effective Date 9/2010)

10. 2014 Reforms: ExpandingAffordability & Access • Expands Medicaid coverage to most uninsured low-income adults • Provides new subsidies for individuals & families to purchase coverage through a new health insurance marketplace (exchange) • Expands affordable, employer-sponsored coverage • Requires most individuals to have health insurance, if affordable coverage is available, or else pay a penalty

11. Supreme Court Justices voted 5-4 to uphold the individual mandate as constitutional. • Ruled that the penalty that someone must pay if they refuse to buy insurance is a kind of tax that Congress can constitutionally impose • The Court also ruled 7-2 that the federal government cannot sanction states that do not expand their Medicaid program to cover the new mandatory population, by cutting off all Medicaid funds Supreme Court ruling

12. Affordability & Access Medicaid Expansion • The ACA defines a new mandatory population of Medicaid eligibles – up to 138% of the Federal Poverty Level • Currently in Oklahoma, working-age adults are eligible for Medicaid ONLY IF: • Parents of dependent children, AND Income < $7,000 annually (family of three), or • Pregnant women • Healthy working-age adults without dependent children do not qualify for Medicaid under any circumstances • Only 50,000 working-age adults are covered by Medicaid

13. Affordability & Access Medicaid Expansion

14. Failing to expand Medicaid could leave 130,000 uninsured Oklahomans in a ‘coverage crater’ Affordability & Access Medicaid Expansion

15. Federal government pays lion’s share of cost of covering newly-eligible population Affordability & Access Medicaid Expansion Increased Medicaid Spending, Federal vs. State, National, 2014-2022 Source: CBO, Center on Budget and Policy Priorities

16. In Oklahoma, the federal government would spend $8.561 billion on the newly-eligible population from 2013-2022, or some $12 - $17 for every $1 in state spending • State Medicaid spending would increase by just 2.7% • From 2014-2016, state savings in reduced uncompensated care costs would exceed increased Medicaid spending Affordability & Access Medicaid Expansion

17. Medicaid would cover programs currently funded with 100 percent state dollars • Mental health and substance abuse services, public health services, hospital care for inmates • OHCA estimates the state now spends $47 million annually on this population • Coverage of uninsured low-income adults would reduce uncompensated care costs of Oklahoma hospitals and other medical providers by hundreds of millions • OSU economic impact model calculated economic benefits of additional federal Medicaid spending (2014): • 4,187 direct health-care jobs with $151 million payroll; 5,158 indirect jobs with $131.2 million payroll; $29.8 million in state tax collections Affordability & Access Medicaid Expansion

18. Medicaid coverage leads to significantly better physical and financial health • Oregon study of newly eligible Medicaid recipients found them: • 40% less likely to have experienced health decline • 40% less likely to borrow money or leave unpaid bills • 60% more likely to have had mammograms • Three states that expanded Medicaid to low-income adults had 1,500 fewer deaths per year compared to neighboring states Affordability & Access Medicaid Expansion See http://okpolicy.org/wp-content/uploads/2013/03/Medicaid-proves-its-worth-factsheet.pdf

19. 125,000 uninsured Oklahomans expected to gain Medicaid coverage in Oklahoma (Kaiser Commission) • Medicaid expansion would especially benefit the most vulnerable segments of the community: • Part-time and low-income workers • The unemployed • Persons with mental illness and addiction • The homeless • Persons with HIV/AIDS • Persons with chronic health conditions Affordability & Access Medicaid Expansion

20. “Most people who would have been affected by the expansion of Medicaid are not deadbeats, but hard-working Oklahomans trying to raise their children and make a better life for themselves. They have lower wage jobs, without employer-provided insurance” – Doug Cox, R-Grove • “Weigh the evidence and do the math. With the realities facing us, taking advantage of this federal assistance is the strategic way to reduce Medicaid pressure on the State budget. “ – Gov. Jan Brewer, R- Arizona • “I can’t look at the disabled, I can’t look at the poor, I can’t look at the mentally ill, I can’t look at the addicted and think we ought to ignore them. For those that live in the shadows of life, those who are the least among us, I will not accept the fact that the most vulnerable in our state should be ignored. We can help them.” – Gov. John Kasich, R-Ohio Affordability & Access Medicaid Expansion http://okpolicy.org/quotes-in-favor-of-medicaid-expansion

21. As of March 2013, 25 Governors support extending Medicaid, 14 oppose, including Oklahoma Gov. Mary Fallin • 8 Republican Governors have announced their support for extending Medicaid • Arizona, Florida, Michigan, Nevada, New Jersey, New Mexico, North Dakota, Ohio • Federal government has signaled strong willingness to provide states with significant flexibility in expanding coverage to populations below 138 percent FPL Affordability & Access Medicaid Expansion http://www.advisory.com/Daily-Briefing/2012/11/09/MedicaidMap

22. Exchanges are online marketplaces for individuals & small groups to compare and purchase private insurance and/or access public programs with ‘no wrong door’ • The marketplace will sell 4 types (Basic, Bronze, Silver, Gold) of qualified private health plans & provide 24 hour consumer assistance • Oklahoma will have a Federally-Facilitated Exchange Affordability & Access health insurance Exchanges • Exchanges are the only way for individuals earning 133%-400% FPL to access refundable premium assistance tax subsidies

23. Individuals with income between 100% - 400% of federal poverty level will be eligible for refundable tax credits for adults who purchase their own coverage and are not covered through their employer, Medicare or Medicaid • Amount of premium credits based on income (Let’s calculate: http://healthreform.kff.org/SubsidyCalculator.aspx ) • Oklahoma Attorney-General Scott Pruitt pursuing a legal challenge to the availability of premium tax credits to subsidize the purchase of insurance on federally-operated exchange • If successful, Oklahoma’s lawsuit could block access to subsidized coverage for 381,500 residents Affordability & Access Exchanges ]

24. Employers with 50 or more employees will face penalties, whether or not they offer coverage, if at least 1 full-time employee receives a subsidy for the purchase of individual coverage on the Exchange • If a business does not offer coverage: • Employers face a fine of $2,000 per total full-time employees (minus the first 30 workers) • If a business does offer coverage: • Employers face a fine of $3,000 per full-time subsidized employee or $2,000 per total full-time employees (minus the first 30 workers) • Employees of firms that offer coverage are eligible for subsidized coverage on the exchange only if employer coverage is unaffordable • Most employers offering coverage will be able to avoid paying penalties Affordability & Access Employer Responsibility

25. Oklahoma cost-benefit analysis for mid-size employer (BancFirst) concluded employers will be better off by continuing to offer health insurance Affordability & Access Employer Responsibility

26. Businesses with fewer than 50 employees are exempted from any penalty associated with offering insurance coverage • As of 2014, businesses with 25 or fewer employees and average pay <$50,000 are eligible for tax credits towards premiums for coverage for two years if coverage purchased through an Exchange • Full credit (50% or 35% for non-profits) limited to firms with 10 or less employees and average wage of $25,000 or less. • IRS estimates that 4 million businesses will be eligible for these credits Affordability & Access Small Businesses

27. As of 2014, you will be required to have health insurance UNLESS: • You are a member of an Indian tribe • You are incarcerated • You are an undocumented immigrant • Your income is below $9,350 (individual)/ $18,700 (family) • You must pay >8% of your income for health insurance, after taking into account any employer contributions or tax credit • You would have been eligible for Medicaid (<138% FPL but your state opted against expansion) Affordability & Access Individual Mandate http://healthreform.kff.org/the-basics/requirement-to-buy-coverage-flowchart.aspx

28. Penalties for being without health insurance: • 2014 - $95 per adult and $47.50 per child, up to $285 for a family, or 1.0% of family income, whichever is greater • 2015 - $325 per adult and $162.50 per child, up to $975 for a family, or 2.0% of family income, whichever is greater • 2016 - $695 per adult and $347.50 per child, up to $2,085 for a family, or 2.5% of family income, whichever is greater Affordability & Access Individual Mandate

29. Guaranteed Issue: Insurance companies may no longer deny coverage due to pre-existing conditions or gender • Rating variation based only on age (limited to a 3:1 ratio), geographic area, family composition and tobacco use (limited to 1.5: 1 ratio) • No annual limits on coverage for all plans • Essential Health Benefits: Creates four categories of plans to be offered through the Exchanges, and in the individual and small group markets, varying based on the proportion of plan benefits they cover. Insurer Regulation & Oversight

30. Visit the Health Care Reform Resources and Analysis page of our website: • http://okpolicy.org/health-care-reform-resources-and-analysis • See Our Fact Sheets, Issue Briefs, Blog Posts and Commentaries on Medicaid and the Affordable Care Act: • http://okpolicy.org/medicaid-and-the-affordable-care-act • Sign up for email alerts at: http://okpolicy.org For More Information